Protecting Their Interests: EU Members Lobby against 'Harmful' Climate Plan

Protecting Their Interests:EU Members Lobby against 'Harmful' Climate Plan

European countries and businesses have criticized a climate change action plan that the European Commission is scheduled to unveil next week. Their concerns about competition and carbon trading could undermine the EU's commitment to confront climate change.

REUTERS

The EU's member states are firmly committed to fighting climate change -- at least in theory.

As the European Commission puts the finishing touches on a sweeping climate change policy package to be unveiled on Jan. 23, politicians and business leaders from the EU's richest member states are lobbying to revamp draft policies that they believe could harm them in Europe and abroad.

Among the critics of the bill are France, which wants to protect its nuclear investments, Germany, which is worried about its renewable energy sector, and major European auto and steelmakers, who are concerned that Europe could lose its competitive edge.

But the Commission says it will not be bullied into diluting the climate change package. To back down, Commission President José Manuel Barroso told Reuters, would be an international embarrassment after the EU worked to promote itself as the international leader in addressing climate change. "We knew from the very beginning that transforming Europe into a low-carbon economy is not an easy task," said Barroso. "But this is the moment to be serious, responsible and coherent with our commitment."

Barroso was responding to complaints that include a letter from French President Nicolas Sarkozy, in which Sarkozy objected to a policy that would raise the share of energy that Europe derives from renewable sources from 8.5 percent currently to 20 percent by 2020. He said the policy "unnecessarily penalizes the prospects of growth." France wants to have its huge nuclear energy program counted in the mandatory contribution it will be asked to make toward the EU goal, but atomic power, which produces toxic waste, is not considered a form of renewable energy.

Germany and Spain are protesting another proposed policy. Ministers in Berlin and Madrid sent a letter this week to the Commission criticizing a system would encourage companies in Europe to trade renewable energy across borders. They are worried that an EU-wide system would undermine their existing national systems. "This will put a very successful development of renewables at risk, which is not acceptable to our governments," read the letter in part. It was the second time this week that German officials criticized the forthcoming policies, after
Bavarian politicians condemned a proposal to cap the amount of carbon dioxide that new automobiles produce per kilometer they are driven.

In an interview with the German magazine Capital published Tuesday, the EU environment commissioner, Stavros Dimas, denied that a new renewable energy trading system would infringe upon existing "feed-in" systems in Germany and Spain. "Don't worry," said Dimas. "We will ensure that Germany can keep its system without restrictions in (the) future and … we will construct it in such a way that it doesn’t hinder national promotion systems in Germany and other countries -- that's a promise."

Private sector leaders also criticized the forthcoming policy package, saying strict limits on greenhouse gas emissions will hit major industrial polluters unfairly and encourage them to relocate outside of Europe. BusinessEurope, a lobby group that represents most of the Continent's largest companies, said it had learned that the Commission will require industrial polluters to cut emissions to 21 percent below 2005 carbon emission levels by 2020.

EU officials explained that 2005 was chosen because it is the first year in which data includes the impact of the EU's Emissions Trading Scheme; BusinessEurope says it is unfair because it does not take into account efforts to reduce emissions that companies made between 1990 and 2005. In a letter to Commission President Barroso, the group also objected to broader plans to strengthen the continent's carbon trading scheme.

Many of the permits that a company must hold to emit carbon are currently distributed for free, but the Commission is proposing to auction those permits to the highest bidder by 2020. To offset the impact that might have on the competitiveness of a European business, the Commission is
considering a carbon tariff on imports from outside the EU that were not produced within a carbon trading market. Still, BusinessEurope calls the prospect of an auction-based trading scheme "extremely worrying."

The lobbying in Brussels this week is in sharp contrast to the proud tones in which European leaders announced last March their joint agreement to cut carbon dioxide emissions to 20 percent below 1990 levels by 2020 and make major investments in renewable energy and biofuels. As the Commission drafts policies that will make those goals a reality, Europe's richer countries are frustrated that they will be asked to bear the brunt of the collective goal.

EU officials told Reuters this week that the Commission wants to allow the EU's poorest member states to actually increase their emissions, by up to 20 percent above 2005 levels. That would help poor states like Romania and Bulgaria grow their economies -- but could spell trouble for the strong European countries charged with making up the difference.

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